Court Cases

Commission Holds State Bank of India Negligent in ATM Fraud Case


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The Consumer Dispute Redressal Commission of South Mumbai’s district reprimanded the State Bank of India for its negligence towards ATM frauds, which resulted in a customer losing Rs 38,000. The commission stated that if the bank had paid more attention to these rising ATM frauds in their centers, such incidents could have been reduced.

It was also emphasized that since the ATM centers are under CCTV surveillance, banks should act swiftly to address money frauds. As a result, the commission ordered the bank to reimburse the complainant for the amount lost, along with six percent interest from 2014. Additionally, the complainant was awarded Rs 5,000 each for mental distress and litigation expenses.

The incident occurred on September 29, 2014, when Nand Kishor Pawaskar, a resident of Curry Road, attempted to withdraw Rs 2,000 from an ATM. Shortly after, he received a message notifying him of a Rs 38,000 withdrawal from his account. Concerned by this, Pawaskar immediately filed a complaint with the bank’s call center and lodged an FIR with the N M Joshi Marg police station. However, the bank’s response to his complaint was unsatisfactory.

Pawaskar then utilized the Right to Information Act (RTI) to inquire about the number of FIRs registered for similar ATM frauds at the same center. The information revealed that from January 2013 to October 2014, there were a total of 10 FIRs filed for the same fraud, with only two arrests made thus far.

The complainant argued that despite repeated offenses at the same ATM center, the bank ignored security concerns. Consequently, he filed a complaint with the commission seeking the recovery of his lost money.

In response, the bank claimed that there was a high probability the complainant had shared his secret ATM pin, resulting in the monetary loss. The bank also argued that security guards were always present outside the ATM center, dismissing the allegations made by the complainant as baseless.

After reviewing the evidence, the commission held the bank accountable for its negligence. It stated that as soon as the complainant reported the fraud, the bank should have checked the CCTV footage to identify who had cloned the complainant’s ATM card and made unauthorized withdrawals. The bank was deemed responsible for safeguarding the customer’s money, which they entrusted to the bank for safekeeping.

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